The Resolute Mining Limited (ASX: RSG) share price is on watch this morning after the release of its half-year results.
Why is the Resolute Mining share price on watch?
The Aussie miner reported half-year production of 217,946 ounces, up 4.5% from the second half of last year (2H19). 55.6% of production was from its Syama Gold Mine with 39.3% from Mako and 5.1% from Ravenswood.
That production came in at an all-in sustaining cost (AISC) of US$1,020 per ounce including Ravenswood, with Group AISC down from $1276 last period to $955 in 1H20.
The Resolute Mining share price is one to watch after the half-year result underpinned by strong performance from Syama and Mako. The Aussie miner sold off its Ravenswood operations during the year.
Revenue from continuing operations climbed 26.8% higher to US$290.0 million thanks to strong gold prices and operational success.
Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) surged 96.3% higher to US$107.5 million. The group’s EBITDA margin jumped from 12% to 33% during the period.
Resolute Mining reported operating cash flow of $91.1 million with $87.5 million of cash and bullion at the period end.
The group raised $195 million of equity in January 2020 which has helped shore up the balance sheet. That came before the coronavirus pandemic really kicked in with net debt a focus for management in the second half of the year.
FY20 outlook
The Resolute Mining share price is one to watch after reaffirming guidance for FY20.
The Aussie gold miner is targeting 430,000 ounces of production for the full-year at an AISC of US$980 per ounce.
That includes target production of 260,000 ounces from its Syama Gold Mine in Mali at an AISC of US$960 per ounce. Underpinning those forecasts is increased sulphide recoveries and continuing high margin oxide operations.
Resolute is also targeting 160,000 ounces at an AISC of US$800 per ounce from its Mako Gold Mine in Senegal. Consistent, positive cash flows are the key with target recoveries in processing of 92-93%.
Foolish takeaway
The Resolute Mining share price could be on the move in early trade following its half-year results release.
Strong production and pricing has underpinned the group’s half-year earnings with the company on-track to deliver on its FY20 guidance.
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Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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